Aurizon blocked from closing Queensland intermodal

ACCC chairman Rod Sims. ACCC

AURIZON must continue operating its Queensland intermodal business while the ACCC’s case against both Aurizon and Pacific National is heard, the Federal Court has ruled.

The competition regulator instituted proceedings in July against Pacific National and Aurizon for allegedly reaching an understanding about Aurizon’s intermodal business that, it was claimed, could substantially reduce competition in the supply of intermodal and steel rail linehaul services.

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The ACCC alleges Pacific National’s proposed acquisition of Aurizon’s Queensland intermodal business and the Acacia Ridge terminal, as well as an agreement for Pacific National to operate the interstate side of the Acacia Ridge terminal, could each substantially lessen competition.

Following this week hearing, the ACCC has been granted injunctions against Aurizon which require it to continue to operate its Queensland intermodal business.

Competition czar Rod Sims said given Aurizon’s previous announcements about closing its Queensland intermodal business if the Pacific National acquisition was opposed by the ACCC, the ACCC sought an injunction to stop Aurizon from closing its Queensland intermodal business until the proceedings were determined by the Court.

“It is part of the ACCC’s case that, at all times, Aurizon had alternatives to selling to Pacific National that would have been more competitive,” Mr Sims said.

“The ACCC is aware of at least one alternative purchaser that is willing and able to acquire Aurizon’s entire remaining intermodal business.”

Final proceedings have been set down for a two week hearing starting on 19 November 2018.

“The ACCC will allege that it was more lucrative for Aurizon to agree to sell parts of the intermodal business to the closest competitor and close parts of that business than it was to sell the whole intermodal business to a new entrant,” Mr Sims said.

In a statement to investors, Aurizon reaffirmed its intention to defend the allegations.

“Aurizon’s intention remains to clear the Acacia Ridge Terminal transaction and Aurizon will of course defend the allegations made by the ACCC in relation to anti-competitive conduct,” Aurizon stated.